This is a common question among those who plan to start a new business. Spain has one of the highest self-employed contribution fees. Many people wonder whether it is worth paying this fee especially if they only work a few hours each month.
Annually each company (and self- employed person) has to report to the Hacienda every other business with which they had a volume of transactions over 3,000€ in the year.
Very often entrepreneurs find the amount of legal and administrative obligations required to start up a business daunting. Some hurry to get their business up and running to be able to care for these expenses which can lead to making serious errors in the process.
Is a dinner with a potential client a deductible expense? What about if you decide to give a present to your employees for Christmas or other holidays, or you host a company dinner at the end of your work season?
In Spanish they use the expression “falso autonomo” to refer to the person that is registered as self-employed but in all practical terms he is actually behaving as an employee of “his client”. This is illegal and penalized as a fraud by the Social Security. What are the options?